Japan, S. Korea likely to buy LNG from Jangkrik field
Amahl S. Azwar
The Jakarta Post
Japan, South Korea and Taiwan'the traditional buyers of Indonesian liquefied natural gas (LNG)'are all likely to purchase natural gas from the Jangkrik Northeast offshore gas field in Makassar Strait, operated by Italian oil and gas company Eni.
The country's interim upstream watchdog SKKMigas commercial control deputy, Widhyawan Prawiraatmadja, told The Jakarta Post on Thursday that the regulator was currently overseeing ongoing discussions between Eni and potential buyers of gas from the Jangkrik field.
While declining to reveal the prospective purchasers, Widhyawan said the country's traditional LNG customers were likely to purchase gas from the Jangkrik field as well.
'Japan, South Korea and Taiwan are the traditional buyers. However, the discussions are still ongoing,' he said in a telephone interview.
Indonesia is one of the world's largest LNG exporters behind Malaysia and Qatar.
SKKMigas expected Eni to conclude the heads of agreement with the potential gas buyers in order for the contractor to wrap up its final investment decisions for the Jangkrik field, said Widhyawan.
The government, he added, is expected to give their consent to the Jangkrik LNG exports after Eni submitted the agreements.
Eni currently holds a 55 percent stake in the Jangkrik field located in Muara Bakau block, Makassar Strait with the remaining stake held by French GDF Suez.
The plan of development (POD) II for the Jangkrik project was approved by SKKMigas in February.
The field is expected to produce 145.5 million metric standard cubic feet per day (mmscfd) of natural gas, which will be processed into LNG at the Bontang plant in East Kalimantan, according to SKKMigas data.
At least 40 percent of the LNG produced at the Jangkrik field is planned to be allocated for domestic needs particularly for the fertilizer-making industry.
Separately, a source familiar with the issue told the Post that Eni would wait for the government to publish a ministerial regulation over the natural gas allocation policy for the Jangkrik field before it could determine the LNG buyers.
The Jangkrik field is one of several big natural gas projects that the government is relying on. The others include US-based Chevron Indonesia's Deep Water Development project that consists of three main fields; the Bangka, Gendalo and Gehem fields in Makassar Strait, and Japan's Inpex Masela block in the Arafura Sea.
Earlier this year, Eni CEO Paolo Scaroni visited Jakarta to meet the Energy and Mineral Resources Minister Jero Wacik, saying that the firm, listed in both New York and Milan, aimed to build a stronger presence in Indonesia.
Scaroni also called the Jangkrik project the firm's 'biggest discovery in Indonesia.'
Eni Indonesia, Eni SpA's subsidiary in the country, has said the firm would invest US$400 million in the next four years for exploration in Indonesia.
Eni Indonesia will begin drilling at its Bulungan block in the Makassar Strait in September. In November, it will drill an exploration well in its Muara Bakau block, located in the same area.
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